Too Big to Succeed

McDonald's is proving the marketing maxim that you can too big to succeed by trying to be everything to everybody instead of identifying and satisfying the needs of your core customers.

McDonald's is proving the marketing maxim that you can too big to succeed by trying to be everything to everybody instead of identifying and satisfying the needs of your core customers.

Large banks may be too large to fail, but consumer-facing companies may find themselves too big to succeed. Take McDonald's, for example.

The fast-food industry pioneer has hit a brick wall, with slipping sales, declining profits and growing questions about its future direction. Under new leadership, McDonald's is trying to regain its footing with the goal of being "modern" and "progressive." But the nagging question remains: Who does McDonald's want to show up at its counter and how do they get them there?

That's the quandary of being big. It's hard to be everything to everybody.

McDonald's quandary should be a cautionary tale for all businesses. Growth of your brand is not synonymous with growing bigger. Trying to get big is not a sure-proof way to succeed and may actually be the road to eventual ruin.

Clearly, McDonald's is one of the most valuable brands and franchises in the world. It owns that position in large part because it created the fast food category with a simple menu, quick service and low prices. When you went to the Golden Arches, you didn't expect great cuisine. It was burgers, fries and a shake on the go, for cheap.

Lifestyles and tastes have changed. New competitors have cropped up, creating new fast-food subcategories such as fast casual. Simple, quick and low-priced can still be a winning strategy, but maybe not for a goliath like McDonald's that is trying to serve other tastes at the same time.

Brands are built by claiming their own space in customer's heads  and then fighting to retain that space. Volvo builds cars with "safety" in large letters and "style" in smaller letters. BMW produces the ultimate driving machine. Once the symbol of luxury, Cadillac now searches for its customer identity.

Brand-building involves a relentless focus on the qualities customers expect from you. If how you are viewed by customers becomes blurry, then it becomes harder for you to focus. You may still be growing, but that growth could be misleading. You could growing too big to succeed.